There are many levels to that question. I'd like to say it's disheartening for federal public servants to see that their work is being outsourced. The government is actually valuing that work by paying the market rate of the service plus markup, while public servants are perpetually being told the government can't meet market rates for them.
I won't lie, IT workers walk away from the public service to join contractors, because they are getting the respect they need and the pay they deserve. Why wouldn't they? It's an endless kind of cycle. If we don't break it now, it will decimate the federal public service.